Jasper United Had Sales of $21,000 in 2011 and $24,000

question 39

Multiple Choice

Jasper United had sales of $21,000 in 2011 and $24,000 in 2012.The firm's current accounts remained constant.Given this information,which one of the following statements must be true?

• A)The total asset turnover rate increased.
• B)The days' sales in receivables increased.
• C)The net working capital turnover rate increased.
• D)The fixed asset turnover decreased.
• E)The receivables turnover rate decreased.

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Definitions:

Variable Costing

A costing approach where only the variable costs involved in production—such as raw materials, direct labor, and variable manufacturing expenses—are included in the cost of goods sold, leaving out fixed manufacturing overheads.

Contribution Margin

The amount by which the sales of a product exceed its variable costs, representing the portion of sales revenue that contributes to covering fixed costs and generating profit.

Unit Product Cost

The total cost (direct materials, direct labor, and overhead) to produce one unit of a product.

Absorption Costing

An accounting method that includes all manufacturing costs (direct material, direct labor, and both variable and fixed manufacturing overhead) in the cost of a product.